Are We at Risk of a Global Straightjacket?

This article was published in the spring 2017 edition of “The International Economy”.

It is argued that global non-financial debt levels (public plus private)are now so high they constitute a kind of “debt trap” for monetary policy. Interest rates must be raised to prevent debt levels from rising further, but cannot be raised without triggering another crisis that we all wish to avoid. It is imperative to take measures to prevent a disorderly restructuring or repudiation of debts that can not be serviced at higher interest rates.

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ABOUT WILLIAM WHITE

William (Bill) White has been intimately involved with the process of macroeconomic policy setting for over forty years. He is currently the Chairman of the Economic and Development Review Committee at the OECD, which makes policy recommendations to associated countries.